AMSC Seals USD 500 Million Loan, About to Close Philly Tankers Sale

American Shipping Company (AMSC) has sealed a USD 500 million refinancing of its secured bank debt with a group of lenders announced earlier this year.

The loan agreement was signed on October 28th and is structured in two separate facilities; one being a USD 350 million facility with a club of three banks consisting of BNP Paribas, Credit Agricole, and SEB, secured by eight vessels, and the other a USD 150 million facility with CIT Maritime Finance, secured by two vessels.

On a combined basis, the average weighted tenor is 6 years, with average weighted interest cost of Libor + 320 bps margin and total annual installments of USD 32 million.

The company said it would enter into interest rate swaps for a minimum of USD 210 million of the new debt.

Funding is expected to take place during the fourth quarter of 2015.

The company further added that it has entered into advanced discussions to sell its 25,000 shares in Philly Tankers to a non-disclosed party with expected signing of final agreements shortly.

AMSC reported USD 22.1 million in revenues for the third quarter of 2015, the same as in the corresponding period last year. The company’s net profit for the first nine months of 2015 was USD 12.6 million, USD 7 million lower that in the corresponding period from last year.

As informed by the company, the U.S. Jones Act product tanker market has remained strong throughout 2015.

During Q1, long-term time charters were secured by Philly Tankers for two of its newbuildings, scheduled for delivery in Q4 2016 and Q1 2017. In July 2015, Philly Tankers declared its two options with Aker Philadelphia Shipyard with deliveries in 2017.

“The four ship transaction between Philly Tankers and Kinder Morgan, which was signed after the end of the second quarter, demonstrates robust asset values and that shipping remains an attractive alternative for US domestic transportation of oil and products. With limited availability for new delivery slots at the two shipyards currently able to build Jones Act product tankers, it is expected that the Jones Act tanker market rates will remain firm in the medium term,” AMSC said.